TERRE HAUTE, Ind.
(AP) - Indiana’s school districts are bracing for big changes approved by
lawmakers that will alter how they handle their budgets and school funds.

Lawmakers passed
the changes last year with the goal of giving school districts greater
flexibility in spending and to clarify how much is spent on student
instruction versus operations and administration costs. The changes will
take effect Jan. 1, 2019.

“It’s a huge
change,” said Dennis Costerison, the executive director of the Indiana
Association of School Business Officials, who worked with lawmakers drafting
the bill.

The Legislative
Services Agency says the law eliminates the school general fund and replaces
it with an “education fund” meant for only expenses related to student
instruction. It also creates a new “operations fund” that replaces funds for
capital projects, transportation and bus replacement.

“Not having a
general fund is a cultural shift,” Costerison told the Tribune-Star. “It’s a
major change in how schools will do their accounting.”

The revenue source
for the education fund will be state tuition support based on enrollment,
which is similar to the current general fund. School boards can transfer
part of that money to the operations fund to cover those expenditures that
are transferred.

“It will be easier
to use money as needed, rather than having it in separate ‘silos,’” said
Purdue University economist Larry DeBoer, who has studied Indiana government
spending for about 30 years. “I can remember governors and legislators
wanting to know how much schools are spending directly on classroom
instruction, rather than operations or administration. Now with the
education fund, we’ll have a number that does that.”